Kohl’s (NYSE:KSS) has entered into exclusive negotiations with retail holding company Franchise Group, which is proposing to buy the retailer for $60 per share.
Such a price tag would value Kohl’s at roughly $8 billion.
Kohl’s shares closed Monday at $42.12, giving the retailer a market value of about $5.4 billion.
Franchise Group is working with Oak Street Real Estate Capital to finance the deal mostly through real estate, according to a person familiar with the matter. The person requested anonymity because the deal isn’t finalized.
The transaction remains subject to approvals of both companies’ boards of directors, Kohl’s said in a press release. There’s no guarantee that any agreement will be reached, it said.
The exclusive period of three weeks will allow Franchise Group — which owns the Vitamin Shoppe and Buddy’s Home Furnishings, among other brands — and its financing partners to finalize due diligence and financing arrangements, and for the parties to complete the negotiation of binding documentation, Kohl’s said.
The retailer added that it will have no further comment until an agreement is reached or the discussions are terminated.
In mid-January, activist hedge fund Macellum Advisors then pressured Kohl’s to consider a sale. Macellum’s CEO, Jonathan Duskin, argued that executives were “materially mismanaging” the business. He also said Kohl’s had plenty of potential left to unlock with its real estate.
In early February, Kohl’s said it had brought on bankers at Goldman Sachs and PJT Partners to help the retailer field offers.
KSS shares vaulted $3.17, or 7.6%, to $44.79.
